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Total and public expenditure on health

By OECD on Apr 23, 2007
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Public and private health expenditure

In most OECD countries, expenditures on health are a large and growing share of both public and private expenditure. The level of health spending varies widely across countries, reflecting different market and social factors as well as the different financing and organisational structures of the health system in each country.

Definition

Total expenditure on health measures the final consumption of health care goods and services (i.e. current health expenditure) plus capital investment in health care infrastructure. This includes spending by both public and private sources (including households) on medical services and goods, public health and prevention programmes and administration. Excluded are health-related expenditure such as medical training and research and development. The two major components of total current health expenditure are expenditure on personal health care and expenditure by governments on collective services.

Comparability

The definition of total health expenditure can vary among countries: particular areas affecting the comparability are the treatment of long-term care, the degree of inclusion of expenditure of non-profit institutions and corporations, and the coverage of capital formation. For Belgium, Japan and the Slovak Republic, data shown for 2004 actually refer to 2003. The 1990 data for Germany refer to 1992 and to 1991 for Hungary. For Denmark, the chart shows current expenditure rather than total.

Health expenditure per capita, converted to US dollars using purchasing power parities (PPP), can be used to compare the overall level of consumption of health goods and services across countries. The economy-wide PPPs for GDP are used as these are the most available and reliable conversion rates.

Long-term trends

In terms of total health spending per capita, the United States is way ahead of the next highest spending countries – Luxembourg, Switzerland and Norway, and well over double the unweighted average of all OECD countries. At the other end of the scale, Poland, the Slovak Republic, Mexico and Turkey spend well below half the OECD average.

Since 1990, health spending has grown faster than GDP in every OECD country except Finland, although this growth has not been constant. For example, between 1997 and 2004, health expenditure increased by 4.3% per year on average, twice the overall economic growth rate. This compares with the previous period (1992-1997), when the growth rate of health expenditure was 2.6% – only slightly above that of overall economic growth.

In most OECD countries, the bulk of healthcare costs is financed through taxes, with 73% of health spending on average publicly funded in 2004. Ensuring sustainable financing of health systems is critical for governments, as health spending as a share of GDP is projected to increase further due to costly new medical technologies and population ageing.

Although the public share of health spending has fallen in countries such as Poland, Hungary and the Czech Republic which had a relatively high public share of health spending in 1990, it has risen in countries where it was low, such as Korea, Mexico, Switzerland and the United States. In Korea, for example, the public share of health spending rose from 39% in 1990 to just over 50% in 2004. In the United States, it increased from 40% to 45% between 1990 and 2004. Although the private sector in the United States continues to play the dominant role in financing, public spending on health per capita is still greater than that in most other OECD countries, because overall spending on health is much higher than in other countries.

Source

OECD (2006), OECD Health Data 2006, OECD, Paris.

Further information

Analytical publications

OECD (2004), The OECD Health Project: Towards High-Performing Health Systems, OECD, Paris.
OECD (2004), The OECD Health Project: Private Health Insurance in OECD Countries, OECD, Paris.

Statistical publications

OECD (2007), Health at a Glance: OECD Indicators, OECD, Paris.

Methodological publications

OECD (2000), A System of Health Accounts, OECD, Paris.

Online databases

OECD Health Data.

Source

OECD Factbook 2007 - Economic, Environmental and Social Statistics

Summary

Time Series Data

Range 1990 to 2004
(14 years)
Scale Yearly
Rows 384

Columns 5

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Data Summary

Showing last 6 rows and first 4 columns

Country	Unit	Public or Total	Year	Value

Slovenia	As a percentage of the OECD average	Public expenditure on health per capita	1990
Slovenia	As a percentage of the OECD average	Public expenditure on health per capita	2000	39
Slovenia	As a percentage of the OECD average	Public expenditure on health per capita	2004	38
Slovenia	As a percentage of the OECD average	Total expenditure on health per capita	1990
Slovenia	As a percentage of the OECD average	Total expenditure on health per capita	2000	72
Slovenia	As a percentage of the OECD average	Total expenditure on health per capita	2004	71
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